CY 2025 Medicare Physician Fee Schedule proposals for the Medicare Shared Savings Program and Quality Payment Program

On July 10, 2024, the Centers for Medicare and Medicaid Services (CMS) issued the Contract Year 2025 Medicare Physician Fee Schedule (CY2025 MPFS) proposed rule. Among many proposals, CMS seeks to implement updates to the Medicare Shared Savings Program (MSSP) and the Quality Payment Program. The following provides an overview of the changes to these programs. Please also see our alert covering other proposals in the CY2025 MPFS proposed rule.

Medicare Shared Savings Program

CMS has proposed numerous changes to the MSSP. Key proposals include:

• Sunsetting ACO termination for having fewer than 5,000 assigned beneficiaries. For performance year 2025 and beyond, CMS would no longer require termination of an ACO whose assigned beneficiaries fall below the statutorily required 5,000. CMS instead believes that its variable MSR/MLR policy effectively addresses concerns that a small population could negatively impact both CMS and the ACO with respect to expenditure calculations. The variable MSR/MLR policy (finalized in 2018) implemented a sliding scale based on the number of assigned beneficiaries from 1 to 60,000 and mitigates the risks posed by a small population.


• Sharing MSSP application with antitrust agencies. Starting with performance year 2025, CMS would sunset its existing regulations and guidance based on the Federal Trade Commission (FTC) and Department of Justice (DOJ) “Statement of Antitrust Enforcement Policy Regarding Accountable Care Organizations Participating in the Medicare Shared Savings Program.” CMS would instead share and require each ACO to allow CMS to share, the ACO’s application to participate in the MSSP with the FTC and DOJ. The basis for this change is that in 2023 these agencies withdrew their longstanding antitrust guidance for the MSSP and other health care provider arrangements.


• Updating definition of primary care services. Starting with performance year 2025, CMS would apply a new definition for primary care services, which is used to determine beneficiary assignment, and to add a number of new HCPCS codes and CPT codes, including codes for safety planning interventions, post-discharge telephonic follow-up contacts intervention, virtual check-in services, advanced primary care management, cardiovascular risk assessment and risk management services, interprofessional consultation services, direct care caregiver training services, and individual behavior management/modification caregiver training services. In some cases, one or more of these services may not yet be finalized under the Medicare fee-for-service payment policy.


• Voluntary alignment. CMS would revise the MSSP regulations to broaden a limited exception to the MSSP’s voluntary alignment policy and allow a voluntarily aligned MSSP beneficiary to be claims-based assigned to an entity participating in a disease or condition specific CMS Innovation Center model under certain circumstances.


• Quality performance standard and other reporting requirements. Beginning in performance year 2025, ACOs would be required to report the Alternative Payment Model (APM) Performance Pathway Plus (APP Plus) quality measure set, which would incrementally grow to include more measures over time. The collection types for reporting the APP Plus quality measures would be focused to certain electronic clinical quality measures (eCQMs) and Medicare clinical quality measures. Not only would ACOs be required to report this measure set but all Merit-Based Incentive Payment System (MIPS) eligible clinicians, groups and APM Entities would also be required to report on all measures in the set, as applicable where they choose to report that measure set.
  
  In addition to these key proposals, CMS proposes to establish a Complex Organization Adjustment for Virtual Groups and APM Entities, including MSSP ACOs, when they report eCQMs. This adjustment would add one measure achievement point for each submitted eCQM that measures the case minimum requirement and data completeness requirement, subject to overall caps on points that can be earned. CMS would score Medicare CQMs using flat benchmarks in the first two performance periods in MIPS. CMS believes the flat benchmarks will allow ACOs with high quality scores to earn maximum or near maximum achievement points while allowing for quality improvement and rewarding improvement in subsequent years, and that such flat benchmarks would avoid penalizing ACOs with high quality performance on a measure as being a low performer.
  
  Lastly, CMS would extend the eCQM reporting incentive for meeting the MSSP quality performance standard to performance year 2025 and subsequent years. By meeting certain reporting standards and achieving certain quality performance scores, an ACO would meet the MSSP quality performance standard for sharing in savings at the maximum rate under the ACO’s track.


• Option for prepayment of shared savings. While CMS currently allows new ACOs to obtain advance payments of shared savings to support the ACO’s investment in staffing, infrastructure, and accountable care for underserved beneficiaries, there are no such advance payments for existing ACOs. CMS sees value in prepaying shared savings during a performance year to allow ACOs to invest the payment in additional services for beneficiaries, staffing and infrastructure. An ACO would need to have a history of earning shared savings and meet other criteria.


• Terminating advance investment payments. CMS would allow ACOs receiving advance investment payments to voluntarily terminate that payment option while remaining in the MSSP. Additionally, new rules would impose requirements for repaying those payments within a specified timeframe, including the obligation to repay CMS if CMS terminates the ACO’s participation agreement.


• Revisions to financial methodologies. To encourage ACO participation in the MSSP, CMS is proposing revisions to the MSSP financial methodology. In addition to various technical changes, CMS is looking to apply a health equity benchmark adjustment to adjust upward an ACO’s historical benchmark, establish a calculation methodology to account for the impact of improper payments in recalculating expenditures and payment amounts, and establish an approach to identify significant, anomalous, and highly suspect billing activity and exclude related payments from expenditures and revenue calculations. Lastly, CMS is also seeking comment on a higher risk, higher reward track for MSSP ACOs participating in the ENHANCED track.


• Modifications to beneficiary notifications. CMS is proposing two changes to the beneficiary notification requirements. First, in addition to ACOs’ obligation to provide initial notifications to beneficiaries about certain MSSP matters, ACOs must also provide a follow-up communication. That follow-up communication must occur no later than the earlier of the beneficiary’s next primary care service visit or 180 days from when the initial notice was provided. CMS is proposing to remove the requirement regarding the visit due to the difficultly in operationalizing that requirement. Second, ACOs that select preliminary prospective assignment with retrospective reconciliation are assigned beneficiaries in a preliminary manner before the start of the performance year. CMS has expressed concerns that the current beneficiary notification requirements cause these ACOs to notify beneficiaries who are not ultimately assigned to the ACOs. CMS is now proposing to limit the requirement so that these ACOs are only required to notify beneficiaries who are more likely to be assigned to the ACOs when compared to the population of beneficiaries who must receive the notification.

Quality Payment Program

CMS has also proposed numerous changes to the Medicare Quality Payment Program. Key proposals include:

• Updates to the Merit-Based Incentive Payment System (MIPS). CMS proposes to leave the performance threshold for determining payment adjustments at its current level of 75 points. It also proposes a variety of other changes to the MIPS inventory and various methodologies.


• MIPS Value Pathways (MVPs). CMS proposes to establish six new MVPs for complete ophthalmology care, dermatological care, gastroenterology care, optimal care for patients with urologic conditions, pulmonology care, and surgical care, while consolidating two neurology-related MVPs (Optimal Care for Patients with Episodic Neurological Conditions and the Supportive Care for Neurodegenerative Conditions) into a single consolidated neurological MVP titled, “Quality Care for Patients with Neurological Conditions.” CMS also proposes to change certain scoring methodologies among other changes.


• APM Performance Pathway (APP). CMS is proposing to create an APP Plus quality measure set beginning with contract year 2025. This measure set would add additional measures to the APP and would be required for the MSSP ACOs (as discussed above). It would be optional for other APP participants.


• Advanced APMs. CMS proposes to implement the transition from the incentive payment for participating in an advanced APM to separate conversation factors for advanced APM participants and non-advanced APM participants. Beginning with payment year 2026, participants would receive a higher specified percentage update to the conversion factor each year than non-participants.


• Promoting Interoperability. In addition to some requests for information, CMS proposes various changes regarding data submissions for the MIPS performance category for Promoting Interoperability, particularly with respect to how CMS will process multiple data submissions.

For information or questions about this alert or other proposals in the CY2025 MPFS, please contact the author of this alert or any member of our healthcare regulatory practice group.